Genesis, a cryptocurrency lending giant, was seeking an emergency $1 billion funding from investors before it announced plans of suspending withdrawals, The Wall Street Journal (WSJ) has learned.
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According to a confidential fundraising document, the firm was seeking $1 billion by Monday due to a "liquidity crunch due to certain illiquid assets on its balance sheet," without naming them. Genesis also told investors there was an "ongoing run on deposits driven mainly by retail programs and partners of Genesis (i.e., Gemini Earn) and institutional clients testing liquidity."
A spokesperson for the New York-headquartered firm told WSJ that the firm is currently having "very positive conversations" with investors interested in funding.
As iHodl earlier reported, Gemini Earn halted withdrawals, citing issues at Genesis. The lending arm of the Gemini cryptocurrency exchange said in a blog post that Genesis' partial suspension of services had made it impossible to meet requirements of the service-level agreement.
According to reports, Genesis interim CEO, Derar Islim, referred to FTX's bankruptcy as the reason behind the difficulties during a call on Wednesday.
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